A record number of Chinese companies will descend upon Los Angeles for the American Film Market this week. Whether the invasion generates any business is a subject of great debate.

“Everybody has a Chinese co-production or Chinese-slanted movie that could do well in China, but nobody really knows,” Daniel Wagner, CEO of BiFrost Pictures told TheWrap. “Even though everyone is trying very few are doing. Not that many Chinese co-productions are actually happening.”

The appeal of working with Chinese companies is obvious. A movie endowed with co-production status skirts the company’s import quota and thus has an easier time securing a release date. A Chinese partner of any kind can advise you on story lines and casting more palatable to the Chinese market.

China is the second-largest film market in the world, with one expert projecting revenue would surpass $3.5 billion this year. Yet the hurdles to making a deal are daunting.

“It’s probably more complex in China than any other country, especially with co-productions,” Mark Gill, president of Millennium Films, told TheWrap.”It’s not easy, transparent or obvious, but it is doable.”

China Film’s Zhang Xun tried to make the co-production regulations a bit more transparent at a summit on Tuesday, and Gill said you’d “have to be taking stupid pills” not to try and penetrate the market in spite of any complications.

Millennium has been able to secure release dates for its higher-profile films, such as “The Expendables 2.” Its movies with smaller budgets have had no such luck, and those movies make up the bulk of the slate of AFM.

“Unless tons of titles are announced this week, I don’t see a lot of big packages,” Myles Nestel, co-chief of the Solution Group, told TheWrap.

Nestel’s company has financed, produced or sold 15 movies in the past 18 months, but it has yet to take plunge into China.

“You still need to deal with censorship,” Nestel said. “It’s somewhere to get a significant percentage of your budget, but the project has to be in the vein of what those companies want.”

Jonathan Wolf, managing director of AFM, said the difficulty lies in knowing how the Chinese marketplace will develop. It could be more like India, which produces hundreds of films for domestic consumption and has little interest in importing American movies.

Chinese movies like “Lost in Thailand” have found great success at the box office, which could augur even greater emphasis on homegrown films.

“While everyone sees China as a source of both investment and revenue, the real question is will its film industry drive a culture and consumer taste such that they don’t want movies with subtitles,” Wolf said.

Several executives at a summit on Tuesday rebuffed this notion, arguing that China had grown up watching American movies and would always want to. Interest from Chinese companies is stronger than ever.

“The market is flourishing,” Paradigm’s Ben Weiss told TheWrap. “It’s everything from financiers to animation houses to treaties with other countries. There’s a lot of equity in China and a strong appetite to spend.”

Now it’s time to figure out how to spend it.

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